Saturday, June 17, 2006

Does Bill Gates Matter?

The financial investor says "probably not".

As you may know, Bill Gates announced that he will be giving up his day to day activities with Microsoft, though he will remain Chairman. The transition period is two years. Microsoft stock ended up slightly after the announcement in a down NASDAQ market. As you know, the stock is a prediction of the future cash flows to be derived from the stock, discounted based on the perceived stability of such predictions and the alternative sure return (US Treasuries). So the investor is saying that he does not matter financially--or just maybe the company is a bit better off. And of course he does matter. My hope is that he will have the same impact on the lives of the impoverished as has had on the lives of people who can afford a PC. And one day, for his work he will be awarded the Nobel Prize.

I never got to tell you my Bill Gates story in class but there is a lesson. A friend of mine was head of large enterprise and public sector business development for Microsoft in Japan. They had a meeting with the Prime Minister. Bill Gates during the meeting said to the PM that the Government of Japan should upgrade their PCs every three years instead of the current five year cycle. His talk was received "politely" with a smile though no real words were exchanged. The meeting finished and the three people from Microsoft (Bill, Japan head, my friend) headed off in different directions. Shortly afterwards, my friend gets a call on his mobile, "xxx-san, this is Bill. Your job is to get the Government of Japan to change its policy on PC upgrades to a three year cycle. You have one year." He had to report to Bill monthly on his progress. At the time, my firend thought it was impossible" and inconceivable. The Japanese government does not move that fast. But with this mission and a sharp focus, he got it done--meeting every single day with various government officials. Lesson: whenleading set goalsthat stretch people's capabilities. By the way his work habits: start work at 9AM; work until 7PM, dinner/entertainment with clients until midnight; return to office until 4AM communicating with Microsoft HQ--go home to sleep; wake up and take his daughter to school and then get back to work.

2 Comments:

My first impression when I knew that Bill would give up was that he was some kind of running away. He ran way at the most controversal time for MS since the company is having a hard time finding a new market. However, when I think again, I think that MS will still be a big guide in the IT world with or without Gates. Their OS has the biggest market in the world and millions of PC are working on it. Linux and some other OS were launched but still cannot beat Windows for its popularity. Gates gives up maybe he does not want to worsen his image especially when everybody talking about Steve Jobs nowsaday. Gates is not a creative man, he is famous for his strategic view. If he could make MS to grow, he already did, I believe. But it is still in the middle of nowhere.Actually, he will not completely give up. He moves behind the curtain to make control. Gates is not the type of person to give up easily.Eventhough, noone can against the fact that MS is earning a lot of money and it will still be a big guide in the IT world.

I have to respectfully disagree with the previous commentator. Anyone who has followed Gates’ career will not fail to see a gradual yet undeniable transformation in his personality reflected by a shift in interest away from Microsoft and towards philanthropy through the Bill & Melinda Gates Foundation. Using Maslow’s well-known framework for human self-development – the Hierarchy of Needs -- one could say that Gates has moved from the esteem needs to self-actualization.

The same transformation seemed to have occurred in Ted Turner, another business titan. In 1998 Turner donated $1 billion in stock to the UN, at the time the single largest donation to a charitable organization.

These two men, Turner and Gates, have done pretty much all that can be done in their respective spheres of business. They don’t need any more money and their egos are in no need of further stoking. What’s more, the nature of either man’s “retirement” does not bespeak of men in flight. Turner did not leave CNN abruptly, and Gates has plans to leave in two years time.

Yes, it can be argued that MS is experiencing a dip in its business, but it’s not as if the company hasn’t experienced fluctuations before. Business has its ups and downs and Gates knows that. One look at his schedule tells you that he still has his fighting spirit; it’s just that now he’s not combating Oracle or Sun, he’s fighting poverty and disease.

Many attribute Gates’ move to philanthropy to his wife Melinda Gates, a devout Catholic. Prior to this union, Gates was a focused (some say “ruthless”) business man and committed agnostic (if there is such a thing!). When asked of religion in a now famous Time interview, he said: “I don’t have any evidence of that… Just in terms of allocation of time resources, religion is not very efficient. There’s a lot more I could be doing on a Sunday morning.” Now, I can’t say for sure that Gates has “found religion”; however, in recent years he has given a lot of his wealth and resources towards the betterment of mankind, and for that he should be given credit. My days of Bill bashing are certainly over (instead I am dedicating my life to helping hungry European models find fulfillment).

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About Me

I have been at the intersection of IT, Finance and the Pacific Rim for the past 20 years in banking, venture capital, private equity and academia. My recent interests are in the application of technology, especially the internet, in emerging markets.